Record keeping requirements and retention

Retain the transaction history

California Business and Professions Code section 10148 requires licensed brokers to retain copies of listings, deposit receipts, canceled checks, trust records, and other documents executed or obtained in transactions requiring a broker license for three years. The period begins at closing if the transaction is consummated, or at the listing date if it is not. Three years is this statutory period, not permission to destroy records subject to another preservation obligation.

After notice, records must be available for examination, inspection, and copying by the Commissioner or a designated representative during regular business hours. Sufficient cause permits an audit without further notice, provided it is not harassing.

Electronic records still need controls

Under 10 CCR section 2729, electronic image storage must be nonerasable write once, read many, preventing changes to stored records. It requires regular-course business records, originals prepared by the broker or retained staff near the event, and a custodian able to identify the records and explain preparation and storage. Reliable indexing, image quality control, and date ordered arrangement support ready retrieval. Retain the images for three years, maintain office viewing capability, and supply DRE-requested paper copies at the broker's expense.

Under section 2729.5, retain electronically signed documents including their electronic signatures, either as paper copies or through section 2729 electronic image storage. Off-site copies are permitted, but office viewing and access after notice remain required.

Trust records connect money to its owner

Section 2831 requires records of trust funds received, including uncashed checks held under principal instructions. Track receipt date, source, amount, deposit date, disbursement check number and date, forwarding details for funds not deposited, and daily account balance as applicable.

Section 2831.1 requires separate beneficiary or transaction records for funds deposited in the broker's trust bank account. Include deposits, disbursements, interest, and balances in chronological order. Under section 2831.2, reconcile these records with the overall trust receipt and disbursement record at least monthly, except months without bank account activity. Preserve the reconciliation record, identifying the account, date, beneficiaries or transactions, and each liability. A bank statement alone does not replace this accounting.